What right does Alloy grant to the franchisee regarding the Facility?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
GRANT OF LICENSE
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- The following provisions control with respect to the license granted hereunder:
- A. Facility. We grant to you the right and license to establish and operate a Facility identified by the ALLOY Trademarks or such other marks as we may direct, at the location identified on the Data Sheet, which location must be designated within 90 days from the date of this Agreement (the "Authorized Location"). The Authorized Location must be located within the area defined in the Data Sheet as the "Designated Area." When a location has been designated by you and approved by us, it will become part of this subparagraph 2.A as if originally stated. If a Facility is not "under control" within 180 days from the date of this Agreement (as defined in subparagraph 5.A), we may grant you an extension of time to locate a Facility or terminate this Agreement. You accept the license and undertake the obligation to operate the Facility using the Trademarks and the System in compliance with the terms and conditions of this Agreement.
- B. Opening. You agree that the Facility will be open and operating in accordance with the requirements of subparagraph 5.A within not later than six months after you sign a lease or 12 months after you sign this Agreement, whichever occurs first, unless we authorize in writing an extension of time.
You may not open your Facility for business until: (1) you have complied with all requirements regarding site selection and construction of the Facility; (2) we determine that your Facility has been constructed, decorated, furnished, equipped and stocked with equipment, materials and supplies in accordance with plans and specifications we have approved; (3) the initial training program we provided has been completed to our satisfaction by all required persons; (4) the initial franchise fee and all other amounts due to us have been paid; (5) you have furnished us
with all certificates of insurance required by this Agreement; (6) you have obtained all required governmental permits, licenses and authorizations necessary for the operation of your Business; (7) you are in full compliance with all the terms of this Agreement; and (8) you have 75 members who have joined during the pre-sale marketing campaign, including a signed membership agreement and a verified credit card on file.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy grants the franchisee the right and license to establish and operate a facility identified by the Alloy trademarks at the location identified on the Data Sheet, which location must be designated within 90 days from the date of the Franchise Agreement. This location must be within the area defined on the Data Sheet as the "Designated Area." Once Alloy approves the franchisee's designated location, it becomes part of the agreement as if originally stated. If the franchisee does not have the Alloy facility "under control" within 180 days from the date of the agreement, Alloy may grant an extension or terminate the agreement. The franchisee accepts the license and is obligated to operate the facility using the trademarks and the Alloy system in compliance with the terms and conditions of the Franchise Agreement.
The Alloy franchisee must open and operate the facility within six months after signing a lease or 12 months after signing the Franchise Agreement, whichever occurs first, unless Alloy authorizes a written extension. The franchisee cannot open the Alloy facility for business until they have met specific requirements, including compliance with site selection and construction, ensuring the facility is properly equipped according to approved plans, completing the initial training program, paying all due fees, providing required insurance certificates, obtaining necessary governmental permits and licenses, and securing at least 75 members with signed agreements and verified credit cards during the pre-sale marketing campaign.
However, Alloy retains rights not expressly granted to the franchisee. Alloy can establish or license others to establish franchised, company-owned, or affiliate-owned facilities at any location, regardless of proximity to the franchisee's designated area. Alloy can also engage in merger or acquisition activity with any businesses or facilities, including those in competition with Alloy, under other systems or marks. These businesses and facilities may convert to or operate under the trademarks and may offer similar services or products, located anywhere. Alloy and its affiliates also have the right to offer, sell, or distribute any services or products associated with the Alloy system through any distribution channels or methods, including the Internet, without compensating the franchisee.